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Job Separation in a Non-stationary Search Model: A Structural Estimation to Evaluate Alternative Unemployment Insurance Systems (2006)
| Venue: | Journal of Applied Econometrics |
| Citations: | 6 - 2 self |
BibTeX
@ARTICLE{García-pérez06jobseparation,
author = {J. Ignacio García-pérez},
title = {Job Separation in a Non-stationary Search Model: A Structural Estimation to Evaluate Alternative Unemployment Insurance Systems},
journal = {Journal of Applied Econometrics},
year = {2006},
pages = {245--272}
}
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Abstract
This paper considers a job search model in which the environment is not con-stant throughout the unemployment spell and where jobs do not last forever. In this situation, reservation wages can be lower than they would be in a model with-out consideration of such separations, but they can initially be higher precisely because of the non-constant environment. The model is estimated structurally by using Spanish data for the period 1985-1996. The main finding is that, after controlling for unobserved heterogeneity, the unemployment hazard rate is almost flat during the first six months. However, after this duration, the highly decreasing job offer arrival rate comes to be the only significant factor, given that acceptance probabilities become equal to one. The estimated parameters are used to evaluate different Unemployment Insurance designs. We conclude that a non-monotonic pattern in unemployment benefits, joint with a tax paid by workers and based on unemployment duration makes this duration to be 13.2 % lower than it currently is in Spain.
Keyphrases
structural estimation non-stationary search model job separation evaluate alternative unemployment insurance system significant factor non-constant environment unemployment benefit different unemployment insurance design spanish data unobserved heterogeneity main finding job search model model with-out consideration reservation wage unemployment hazard rate job offer arrival rate non-monotonic pattern acceptance probability unemployment spell unemployment duration estimated parameter
